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Business combinations and disposal | 12 Months Ended
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Sep. 30, 2016
Business Combinations [Abstract] |
Business combinations and disposal | Business combinations and disposal K-12 Education On May 9, 2016, we sold our K-12 Education business, which was previously part of the Human Services Segment. As a result of this transaction, we recorded a gain of approximately $6.9 million. The K-12 Education business contributed revenue of $2.2 million, $4.7 million and $9.4 million for the years ended September 30, 2016, 2015 and 2014, respectively. We reported operating loss of $0.2 million, operating income of $0.9 million and $2.8 million in the respective years. Included within our September 30, 2015 consolidated balance sheet are total assets of $1.5 million and total liabilities of $2.7 million related to the K-12 Education business. Ascend Management Innovations, LLC On February 29, 2016, MAXIMUS Health Services, Inc., a wholly-owned subsidiary of MAXIMUS, Inc. acquired 100% of the share capital of Ascend for cash consideration of $44.1 million. Ascend is a provider of independent health assessments and data management tools to government agencies in the U.S. We acquired Ascend to broaden our ability to help our existing government clients deal with the rising demand for long-term care services. This business has been integrated into our Health Services Segment. Management has estimated the fair value of intangible assets acquired as $22.3 million, with an average weighted life of 18 years, and the fair value of goodwill as $18.6 million, which is expected to be deductible for tax purposes. We believe that this goodwill represents the value of the assembled workforce of Ascend, as well as the enhanced knowledge and capabilities resulting from this business combination. We have completed our evaluation of the fair value of all of the assets and liabilities acquired with the exception of balances related to taxation. Our allocation of fair value for the assets and liabilities acquired is shown below.
(Amounts in thousands) |  | Purchase price allocation
Cash consideration, net of cash acquired |  | $ | 44,069 |
Billed and unbilled receivables |  | $ | 4,069 |
Other assets |  | 407 |
Property and equipment and other assets |  | 707 |
Intangible assets |  | 22,300 |
Total identifiable assets acquired |  | 27,483 |
Accounts payable and other liabilities |  | 1,414 |
Deferred revenue |  | 554 |
Total liabilities assumed |  | 1,968 |
Net identifiable assets acquired |  | 25,515 |
Goodwill |  | 18,554 |
Net assets acquired |  | $ | 44,069 |
The valuation of the intangible assets acquired is summarized below:
(Dollars in thousands) |  | Useful life |  | Fair value
Customer relationships |  | 19 years |  | $ | 20,400 |
Technology-based intangible assets |  | 8 years |  | 1,700 |
Trade name |  | 1 year |  | 200 |
Total intangible assets |  |  |  | $ | 22,300 |
Assessments Australia On December 15, 2015, MAXIMUS acquired 100% of the share capital of three companies doing business as "Assessments Australia." We acquired Assessments Australia to expand our service offerings within Australia. The consideration is comprised of $2.6 million in cash and contingent consideration of $0.5 million to the sellers of Assessments Australia if sufficient contracts with a specific government agency are won by MAXIMUS prior to December 2022. We have performed a probability weighted assessment of this payment. Future changes in our assessment of this liability will be recorded through the consolidated statement of operations. This business has been integrated into our Human Services Segment. Management identified goodwill and intangible assets acquired as $2.9 million and $0.4 million, respectively. We believe that the goodwill represents the value of the assembled workforce of Assessments Australia, as well as the enhanced capabilities which the business will provide us. We have completed our evaluation of the fair value of all of the assets and liabilities acquired with the exception of balances related to taxation. The intangible assets acquired represent customer relationships. These are being amortized on a straight-line basis over six years. Acentia On April 1, 2015 (the "acquisition date"), we acquired 100% of the ownership interests of Acentia for cash consideration of $293.5 million. Acentia provides system modernization, software development, program management and other information technology services and solutions to the U.S. Federal Government. We acquired Acentia, among other reasons, to expand our ability to provide complementary business services and offerings across government markets. The acquired assets and liabilities have been integrated into our U.S. Federal Services Segment. We have completed the process of allocating the acquisition price to the fair value of the assets and liabilities of Acentia as of the acquisition date (in thousands).
| As of |  |  |  | Updated through
| September 30, 2015 |  | Adjustments |  | September 30, 2016
Cash consideration, net of cash acquired | $ | 293,504 |  |  | $ | — |  |  | $ | 293,504 |
Accounts receivable and unbilled receivables | 35,333 |  |  | — |  |  | 35,333 |
Other current assets | 5,050 |  |  | (1,959 | ) |  | 3,091 |
Property and equipment | 2,140 |  |  | — |  |  | 2,140 |
Intangible assets—customer relationships | 69,900 |  |  | — |  |  | 69,900 |
Total identifiable assets acquired | 112,423 |  |  | (1,959 | ) |  | 110,464 |
Accounts payable and other liabilities | 32,426 |  |  | (1,076 | ) |  | 31,350 |
Deferred revenue | 251 |  |  | — |  |  | 251 |
Capital lease obligations | 567 |  |  | — |  |  | 567 |
Deferred tax liabilities | — |  |  | 6,741 |  |  | 6,741 |
Total liabilities assumed | 33,244 |  |  | 5,665 |  |  | 38,909 |
Net identifiable assets acquired | 79,179 |  |  | (7,624 | ) |  | 71,555 |
Goodwill | 214,325 |  |  | 7,624 |  |  | 221,949 |
Net assets acquired | $ | 293,504 |  |  | $ | — |  |  | $ | 293,504 |
The excess of the acquisition date consideration over the estimated fair value of the net assets acquired was recorded as goodwill. We consider the goodwill to represent the value of the assembled workforce of Acentia, as well as the enhanced knowledge and capabilities resulting from this business combination. Approximately $175 million of the goodwill balance is anticipated to be deductible for tax purposes. The intangible assets acquired represent customer relationships. These will be amortized on a straight-line basis over 14 years. Remploy On April 7, 2015 (the "Remploy acquisition date"), we acquired 70% of the ownership interests of Remploy (2015) Limited, whose assets had previously operated under the "Remploy" tradename. The remaining 30% is held in a trust for the benefit of the employees. The acquisition consideration was $3.0 million (£2.0 million). The purchase agreement stipulated that the net assets of Remploy were zero on the Remploy acquisition date as calculated using U.K. accounting principles. The noncontrolling interest was valued at $0.9 million (£0.6 million) on the Remploy acquisition date. Remploy provides services to the U.K. Government, particularly in supporting employment opportunities for the disabled. We acquired Remploy to complement our welfare-to-work services in the U.K. The acquired assets and liabilities have been integrated into our Human Services Segment. The principal asset held by Remploy on the Remploy acquisition date was a contract worth $4.6 million. This asset is being amortized over two years on a straight-line basis. Centacare On January 31, 2014, we acquired certain businesses from Centacare for $2.7 million ($3.1 million Australian) in cash. The operations of these businesses are consistent with the welfare-to-work services we provide in Australia. The Company acquired these businesses in order to expand our operations in Australia. Of the purchase price, we allocated $3.2 million to intangible assets, representing customer relationships, and $0.5 million to deferred revenue. The intangible assets are being amortized over the anticipated lives of the customer relationships, which are approximately four years. Acquisition related contingent consideration Our financial statements include liabilities relating to payments we must make to the former owners of businesses which we have acquired based upon events which may occur subsequent to the acquisition. At the date of acquisition, we include an estimate of the fair value of these liabilities at that time. Subsequent changes to the fair value are recorded in our consolidated statement of operations. Following our acquisition of DeltaWare Systems, Inc. in 2010, we agreed to make payments of up to $4.0 million (Canadian) if we made sales in particular geographic markets prior to December 31, 2016. No such sales have been made. At both September 30, 2016 and 2015, we have recorded no liability for this potential obligation. Following our acquisition of Assessments Australia, we agreed to pay an additional $0.5 million the sellers of Assessments Australia if sufficient contracts with a specific government agency are won by MAXIMUS prior to December 2022. Upon acquisition and at September 30, 2016, we have reported a liability of $0.4 million. Both estimates of the fair value of the contingent consideration are based upon probability-weighted assessments of likely future sales. As these inputs require significant judgment, they are considered to be Level 3 inputs under the FASB's classification of assets and liabilities subject to fair value measurement.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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